Security breach notification laws

This article is outdated. Please update this article to reflect recent events or newly available information.(May 2014)

Security breach notification laws or data breach notification laws are laws that require an entity that has been subject to a data breach to notify their customers and other parties about the breach, and take other steps to remediate injuries caused by the breach. Such laws have been enacted in most U.S. states since 2002. These laws were enacted in response to an escalating number of breaches of consumer databases containing personally identifiable information.[1]

The first such law, the California data security breach notification law,[2] was enacted in 2002 and became effective on July 1, 2003.[3] As related in the bill statement, law requires "a state agency, or a person or business that conducts business in California, that owns or licenses computerized data that includes personal information, as defined, to disclose in specified ways, any breach of the security of the data, as defined, to any resident of California whose unencrypted personal information was, or is reasonably believed to have been, acquired by an unauthorized person." In addition the law permits delayed notification "if a law enforcement agency determines that it would impede a criminal investigation." The law also requires any entity that licenses such information to notify the owner or licensee of the information of any breach in the security of the data.

In general, most state laws follow the basic tenets of California's original law: Companies must immediately disclose a data breach to customers, usually in writing.[4] California has since broadened its law to include compromised medical and health insurance information.[5]